Macromavens president Stephanie Pomboy tells FOX Business' "Mornings with Maria" that government spending and inflation pressures may start to cause "major problems" for the U.S. economy and the stock market.
Stephanie Pomboy: Well, I think the Fed is really goading inflation to come forward and they may end up regretting that. Powell basically reiterated that they're going to stand there and wait to see the whites of inflation's eyes and then wait until it's full-frontal before they think about thinking about doing something about it, which obviously has the 10-year back to 173 or north of that this morning. And obviously, the portents for that are grim for the stock market insofar as the higher interest rates have always precipitated economic or financial crises in the past.
And the question is, what's that threshold at which that happens at 173 you know how much more runway do we have for the 10-year yield to back up before we start to cause real dislocations in both the economy and the financial markets? And I guess, you know, I would point out that the fact that we've added so much debt in this post-pandemic year lowers whatever that invisible threshold might have been beforehand substantially. So we're probably getting pretty close to a level that's going to start to cause major problems. And as you noted, the futures are now not too happy this morning on the equity side because presumably of this steep back up in interest rates.